Toyota Motor Corp.  is slated to team up with Tesla Motors Inc. – the only all-electric car manufacturer from Silicon Valley that makes cars that are highway-legal– in a partnership that is being considered a major windfall for Toyota.  The Toyota plant in California, which is now defunct, is being bought out by Tesla who have announced their intention of working together to manufacture an electric sedan called the Model S, to be unveiled in 2012.

The two companies are going to combine their synergies into increasing and widening their technological knowhow for new electric vehicles and also to improvise on their methods of manufacturing processes to try and bring in low-polluting vehicles and parts into the market.  Toyota will invest in Tesla stock to the tune of $50 million.

Tesla will have access to the well established Toyota’s immense dealer base and Toyota is expected to get the much needed shot in the arm to compete with rival car manufacturers in the expanding market for environmentally friendly electric vehicles.  In their hybrid Prius, for example, Toyota will be installing lithium-ion batteries made by Tesla, instead of the formerly used hydride units made from nickel.

With the advent of more and more vehicle owners replacing their cars with “green” hybrid vehicles, the local markets for electric cars really seems to be gathering momentum and it is the right time for partnerships like Tesla-Toyota to be getting ready for the high demand it anticipates.

The deal is also expected to help Toyota in selling electric cars in competition with other companies like General Motors Co. and Nissan Motor Co. in the U.S. because regulations are getting more stringent with regard to fuel efficiency and greenhouse gas emissions.

Tesla is based in California and is currently the only vehicle manufacturer in the U.S.  selling battery-powered cars that are legal to be driven on the highway.  In the market of hybrid autos, Toyota too is one of the largest sellers and is headquartered in Toyota City in Japan.  The tie-up is expected to help the United States become independent from using imported energy resources and ushering in the use of electric cars and plug-in hybrids.

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